TREASURY

Unclaimed Assets Scheme

Edward Balls: As announced in the 2005 pre-Budget report, the Government have been working with the banking and building society sector to design an unclaimed assets scheme which both preserves the rights of the individual consumer and at the same time allows these assets to be reinvested in the community. The Government welcomed the commitment from the industry and since then we have been working together to design a scheme.
	The Government are today publishing a consultation document outlining a proposed scheme, including details of the banks' and building societies' proposed changes to the banking code and proposals for legislation.
	The proposal is made with the support of the British Bankers Association and the Building Societies Association and these organisations have signalled in the foreword to the consultation document their commitment to making the scheme work successfully.
	A further consultation document will be released later in the spring to consider the most effective means of distributing the available assets, taking as its basis the statement in the 2005 pre-Budget report that the funds should be reinvested in the community, with a focus on youth services that are responsive to the needs of young people, and also on financial inclusion and capability.
	The 2005 pre-Budget report also announced that there will be an option for small locally based financial institutions to focus on these needs in their local communities. These will typically be building societies, often playing an important role in these communities. It is proposed that small locally based financial institutions will be defined by reference to a threshold level of total assets as in practice this indicates both relatively small and local institutions.
	In line with previous announcements, it is proposed that banks and building societies will participate in the scheme on a voluntary basis, but the scheme will be backed by legislation to resolve issues concerning financial liability for the participating financial institutions and their customers.
	It is proposed that the unclaimed assets scheme will apply to bank and building society accounts where there has been no customer-initiated activity for at least 15 years. On this basis, the banks and building societies estimate that a stock of several hundred million pounds may currently lie unclaimed. They also estimate that a further flow of perhaps tens of millions of pounds may become available each year. These estimates are before the impact of a comprehensive reuniting exercise that banks and building societies will launch in advance of the scheme, building on their existing arrangements to help customers track down their accounts.
	It is proposed that unclaimed assets falling within the definition will be transferred to a central reclaim fund. However, for customers the process for reclaiming the money will not change—they need simply to visit their bank or building society, which will repay them as now. The reclaim fund will bear the financial risk for repaying customers who want to reclaim their assets after the introduction of the scheme. Centralising the risk in a single reclaim fund will allow it to be pooled and managed as efficiently as possible. The reclaim fund will need to be managed prudently so that money is available to fund applications for reclaim. Banks and building societies will be responsible for calculating the amounts to be transferred and for handling the interaction with those customers, so customers will not need to have a direct relationship with the reclaim fund. It is proposed that the reclaim fund will be a freestanding body, independent of Government, the banking industry and the distribution mechanism. It could either be an existing body or a new body. The banking industry's representative bodies will take the lead in selecting or setting up the body, which will then be wholly independent.
	The reclaim fund will hand over for reinvestment in the community those assets not needed to cover anticipated reclaim requests. The need to manage assets for potential reclaim at a later date in order to protect customers' interests will, of course, mean that the reclaim fund will need to hold back a proportion of the assets it receives from the banks and building societies. As well as effective and prudential management of the fund, it is also proposed that customers' interests will be further safeguarded by access to the Financial Ombudsman Service for any disputes between themselves, the fund, and their bank or building society on these issues, and changes to the banking code will clarify how the banks and building societies will themselves interact with the scheme.
	Copies of the consultation document will be available in the Libraries of both Houses.

DEFENCE

Army Regional Command Structure

Adam Ingram: My written ministerial statement of 29 November 2006, Official Report, column 108WS contained an error. The first tiret of the second paragraph should have read:
	(1) From April 2007 garrisons should be commanded by the local deployable brigade commander.

Cluster Munitions

Des Browne: On 4 December 2006, Official Report, column 1WS the Minister of State, Foreign and Commonwealth Office my hon. Friend the Member for Pontypridd, (Dr. Howells), set out in a written ministerial statement the UK position on cluster munitions. We confirmed that we were committed to withdrawing dumb cluster munitions by the middle of the next decade. On 15 December 2006 the Government explained in the other place, Official Report, column 1727-70 that we were examining the possibility of withdrawing dumb cluster munitions from service at an earlier date. This assessment is now complete and I am pleased to announce that we are withdrawing dumb cluster munitions from service with immediate effect.
	We have considered carefully both military and humanitarian factors, reflecting our duty both to ensure that the armed forces have the capabilities they need to undertake the missions we ask of them, and to strive to reduce civilian casualties to the minimum.
	Cluster munitions are legal weapons which have a valid role in modern warfare, particularly against an array of military targets in a defined area. However, they have also given rise to humanitarian concerns because they disperse sub-munitions over an area and those sub-munitions can have a high failure rate. Some cluster munitions address these concerns including through inbuilt self-destructing or self-deactivating mechanisms, reducing the risk of harm to civilians. Dumb cluster munitions do not.
	At the moment, our inventory includes two dumb cluster munitions: the RBL 755 aerial delivered cluster munition, and the multiple launch rocket system M26 munition. Both will be withdrawn from service immediately and disposed of. Although withdrawing them represents a theoretical risk to our operational effectiveness, until their direct replacement is in service, there is no current plan to deploy them on operations. I have decided that this is an acceptable risk.
	The types of cluster munitions we intend to retain are legitimate weapons with significant military value which, as a result of mitigating features, is not outweighed by humanitarian factors. As with all weapons, our forces' use of them will remain regulated by rules of engagement and internal scrutiny procedures designed to adhere to international law and reflect humanitarian values.
	As well as living up to their responsibilities under international law, this decision is part of our wider efforts to reduce civilian casualties and to press other militaries to do the same. We continue to press for wider agreement to ban dumb cluster munitions through the convention on certain conventional weapons (CCW) and complementary initiatives like the Oslo conference on 23 February, where we, alongside other nations, agreed to work towards an international ban in 2008.

ENVIRONMENT FOOD AND RURAL AFFAIRS

Rural Development Programmes

David Miliband: I am pleased to announce that on Monday 19 March the European Agriculture Council voted unanimously in favour of a voluntary modulation regulation tabled by the German presidency. The presidency confirmed that the European Parliament has agreed, on the basis of this text and associated declarations, to lift its 20 per cent. reserve on EU rural development budgets for 2007. This means that the way will be clear for all member states to finalise their new rural development programmes.
	We were successful in securing our two key objectives for the UK in this negotiation: first, the flexibility to continue to apply voluntary modulation rates on a regional basis; and, secondly, the ability to operate voluntary modulation without a franchise. Obtaining regionalisation was crucial and will mean that, in accordance with our devolved Administration arrangements, voluntary modulation rates can be set at the level required in each of the four regions of the UK. Discretion over the franchise—a mechanism that exempts the first €5,000 of a direct payment from modulation—will enable us to keep the rate of voluntary modulation down.
	I am not yet in a position to announce the precise rates of voluntary modulation and domestic co-financing that will apply in England during 2007-13. Following yesterday's important agreement, it will take a little time to finalise these arrangements. However, in the Agriculture Council I was able to confirm that the United Kingdom will table a written declaration at the time the regulation is adopted formally which will say that:
	All four parts of the United Kingdom will be using voluntary modulation;
	The rate of voluntary modulation to be applied will be less than 20 per cent;
	In England, 80 per cent. of voluntary modulation funds raised will be spent on environmental protection and enhancement measures under axis 2 of the rural development regulation, and will be co-financed at a significant level;
	The Commission and Council have indicated their intention to table a joint declaration that indicates that the future funding for pillar 2 will be looked at as part of the forthcoming CAP Healthcheck. The UK supports this intention.
	Any future increase in either compulsory modulation or EU rural development funding would allow the United Kingdom to review the rate of voluntary modulation we apply.
	This has been a difficult and lengthy negotiation and I am very pleased that we have secured agreement to a text that meets the UK's requirements. I now look forward to being able to announce further details about the funding for and content of our new rural development programme in England shortly. I will keep the House informed of any further developments.

FOREIGN AND COMMONWEALTH AFFAIRS

International Corruption (Bribery)

Ian McCartney: I am pleased to publish today the Government's report to the Organisation for Economic Co-operation and Development (OECD) on the UK's progress with implementation of the OECD bribery convention. This complements the report my right hon. Friend the Secretary of State for International Development published on 12 March: "Combating International Corruption: UK Action Plan 2006-07: Interim Progress Report", which summarised a wide range of activities we have undertaken to tackle international corruption. The report published today, which was a subject for discussion at last week's OECD working group on bribery in Paris, accounts for the work we have done in response to the OECD's "phase 2 review" of the UK, published in March 2005. It outlines the achievements we have made in implementing the OECD bribery convention, as well as addressing some of the challenges we have come across in this work. Some additional developments post-date the Government's submission of the report to the OECD.
	First, the changes we have made to UK co-ordination in this area are significant, allowing us to be more effective in our efforts across the board. My right hon. Friend the Secretary of State for International Development's appointment as the ministerial lead on fighting corruption was important. But this is by no means the only development. On the law enforcement side, there has been major progress. The Foreign and Commonwealth Office (FCO) has made it clear to all law enforcement agencies in the UK what practical support it can offer to transnational investigations. On specifics, the Government have confirmed the Serious Fraud Office (SFO)'s lead role in handling foreign bribery allegations and the SFO has created a special unit to vet such allegations. Since March 2005, the SFO has received 53 allegations, launched six new investigations and made four arrests. My noble and learned Friend the Attorney-General has stated that he will seek additional resources for the SFO's work in this area, should that be necessary.
	With funding from the Department for International Development (DFID), the City of London police created a new dedicated 10-person unit to increase law enforcement capacity to investigate foreign bribery allegations. Set up in November 2006, the unit has already taken on four investigations and made its first arrests in January. In parallel, DFID has funded extra staff for the Metropolitan police service's proceeds of corruption unit to increase the UK's capacity to counter the laundering of corrupt assets in the UK's financial system. The Metropolitan police has £34.6 million worth of allegedly corrupt assets under restraint. The Met has responded to requests from the Nigerian Government relating to two former Nigerian state governors. In one case, £1 million has been returned. In the other, property bought in London—which was frozen by swift police action under the 2002 Proceeds of Crime Act—will now be sold so that the funds can be returned to the people of Nigeria from whom they were stolen. We have worked hard on proposals for an International Corruption Investigation Support Centre, a facility which poor countries can use to obtain legal advice on asset recovery and mutual legal assistance. There have been discussions with other interested donors and key service providers. An international expert meeting will take place on 21 March to agree proposals. Furthermore, changes in the UK's mutual legal assistance mechanisms will result in faster execution of requests from other countries.
	In addition, the FCO has assumed a greater co-ordinating role in awareness-raising activities. This has allowed us to make best use of our guidance materials—a revised leaflet explaining UK anti-corruption law and a DVD, launched by my right hon. Friend the Secretary of State for International Development and myself last November. There is more systematic training for officials working overseas and law enforcement personnel, the latter drawing particularly on the experience of the Ministry of Defence police fraud squad. And the fight against corruption has featured in the FCO's regular dialogue with the trade union movement, to complement the rolling programme of sessions we hold for the UK business community, both in the UK and overseas. So, all in all, including inside the Palace of Westminster, there is much greater awareness in the UK of international corruption than there was a few years ago.
	I should comment on legislative developments since March 2005, beginning with the question of comprehensive corruption legislation, which has been taken forward since we submitted this written report to the OECD last month. My right hon. Friend the Secretary of State for the Home Department published the Government's response to the Home Office's 2005-06 consultation on 5 March, Official Report, column 115WS and his statement dealt with it in detail. Times have changed since the Law Commission first reported on this area of the law in 1998. Not only has the OECD published three reports on the UK's implementation of this convention and the UN convention come into force, but our law enforcement agencies now have several years' practical experience of applying the UK's current legal framework. All of these have helped to inform the Government's thinking. We continue to believe that our law meets the requirements of the OECD convention; the objective of this exercise is to clarify and modernise our legislation. As the my right hon. Friend the Secretary of State for the Home Department made clear last week, the consultation confirmed that there is broad support for reform of the prevention of corruption Acts and the Government remain committed to a fundamental reform. We shall bring forward legislative proposals as soon as we are in a position to do so. Ministers have asked the Law Commission to review the law of bribery and, in the light of their findings, to prepare a draft Bill, complete with extra resources to expedite the process. The Law Commission will have a broad mandate to consider the full range of structural options for a new modern and consolidated bribery law.
	We have also been active in a number of other international forums. For example, the UK was a key participant at the first conference of states parties to the UN convention against corruption in December 2006, ensuring that we can take forward implementation on the crucial issues of asset recovery, technical assistance and review mechanisms. We also funded the participation at that conference of civil society representatives from more than a dozen developing countries to ensure that their voice was heard. We continue to help to deliver on G8 anti-corruption commitments, for example, on asset recovery.
	The report also outlines a good degree of progress in the Crown dependencies and overseas territories. Guernsey and Jersey have both made progress towards implementing international anti-corruption treaties, as have several overseas territories. We have already extended the UN convention against corruption to the British Virgin Islands and hope to be in a position to extend this and the OECD convention to the Cayman Islands when it enacts new legislation later this year. We shall continue to raise the subject with the dependencies and territories at relevant opportunities, including at the highest level.
	Following on from this week's discussions in Paris, the Government will continue to inform the OECD of further progress in this vital area. This co-operation will include our usual constructive approach to the preparation for and conduct of a future on site visit to the UK by experts from two other OECD countries in the coming year and contributions to a further written report on the UK. The visit and report will focus on the operation of our legal framework and law enforcement capacity and systems. We fully anticipate further recognition of the high level of transparency that characterises the UK's activities in this field. And we welcome the opportunity to demonstrate the degree of our commitment to all aspects of the fight against international corruption. As well as work under the OECD bribery convention, we shall continue to pursue our wider efforts in this regard, including by pushing for effective implementation of the UN convention against corruption, through G8 initiatives, the provision of technical assistance by DFID, the FCO and law enforcement experts and continued close engagement with the business community in key sectors.

HEALTH

NHS Trusts (Originating Capital)

Patricia Hewitt: Pursuant to the dissolution of 41 national health service trusts on 1 April 2006, 1 July 2006 and 1 October 2006 and their reconfiguration through the establishment of 16 new NHS trusts, I propose to create originating capital for the new NHS trusts equal to the net assets transferred to them and therefore to remit the outstanding debt of the dissolved trusts.
	These operations involved no overall loss to the Exchequer. A minute giving particulars and circumstances of the proposed remission, which has been approved in principle by Her Majesty's Treasury, has today been laid before Parliament.
	The minute has been placed in the Library.

HOME DEPARTMENT

Identity and Passport Service

Joan Ryan: The Identity and Passport Service is today publishing its business plan for the year commencing April 2007. Copies of the document will be placed in the Library of the House.

Passport Fraud

Joan Ryan: Further to the statement of 2 May 2006 by my hon. Friend the Member for Leigh (Andy Burnham), the then Parliamentary Under-Secretary of State for the Home Office, announcing the proposed introduction of interviews for adult first-time passport customers, the House will wish to know that I am announcing today the opening of the first passport interview offices commencing in May with further offices to be added progressively throughout 2007.
	Passport interviews are part of the continuing fight against attempted passport fraud and forgery and are being introduced alongside other counter fraud initiatives. These changes are critical because of increasing levels of attempted passport and identity fraud. It is widely recognised that the very nature of identity fraud makes it difficult to be precise when estimating the scale of the problem in terms of the number of fraudulent passport applications. The Identity and Passport Service has sought to address this issue through special exercises that scrutinise a representative sample of passport applications.
	During the period 31 October 2005 to 30 September 2006, a sample of several thousand applications were scrutinised by specialist Identity and Passport Service teams with support from fraud investigators. This found that 0.25 per cent. of applications (equivalent to 16,500 fraudulent passport applications a year) were believed to be from people attempting to obtain a passport fraudulently. Almost half of these applications were stopped by existing Identity and Passport Service processes. The remainder had gone undetected. Our current estimate is therefore that the level of undetected fraud is about 0.15 per cent. (equivalent to 10,000 applications against the planned 6.6 million passports issued per year).
	Although precise figures are difficult to obtain, it appears that the level of attempted fraud is increasing and getting more sophisticated. Analysis of the frauds shows that the main fraud threat is from first time adult applications followed by first time child applications.
	The Identity and Passport Service has developed a comprehensive counter fraud strategy that will help to mitigate these patterns of fraud including:
	Checking biographical information to ensure that the identity claimed on the application form is real, living, and can be linked to the customer through cross checks against a range of public and private sector databases;
	the development of facial recognition systems to check applicant images against a database of images of suspected fraudsters;
	checking applicants against increasingly sophisticated internal watch files including the database of passports reported lost or stolen;
	strengthening its business processes for identity authentication, and training and support for passport examiners and specialist fraud units;
	interviews for all first-time adult customers.
	The requirement to attend an interview will be introduced gradually, starting with modest volumes of interviews in a limited number of interview offices from May 2007, with the Identity and Passport Service progressively adding further offices through to the end of 2007. This progressive introduction will enable the Identity and Passport Service to enhance the interview process for customers using feedback from the early interviews.
	These measures are essential to protect our citizens from identity theft and to ensure that the British passport remains one of the most secure and respected in the world.
	I have placed an "Introduction of Passport Application Interviews" document in the Libraries of both Houses setting out the updated plans.

PRIME MINISTER

Organisation for Security and Co-operation in Europe

Tony Blair: The hon. Member for Rochdale (Paul Rowen) has been appointed as a full member of the United Kingdom delegation to the Parliamentary Assembly of the Organisation for Security and Co-operation in Europe in place of the right hon. and learned Member for North-East Fife (Sir Menzies Campbell). The hon. Member for Cheadle (Mark Hunter) has been appointed as a substitute Member in place of the hon. Member for Rochdale.

TRADE AND INDUSTRY

Clergy Working Group

Jim Fitzpatrick: The Department of Trade and Industry (DTI) set up the Clergy Working Group in 2004 to look at clergy working conditions as part of its review of employment status issues. The working group included representatives from trade unions and many faith groups and was chaired by the DTI.
	Discussions within the Clergy Working Group have resulted in the development of a statement of good practice. The statement represents minimum standards that faith groups should aim to achieve, on a voluntary basis, in a variety of areas—terms and conditions of work; resolving disputes; development and personnel support; and information and consultation.
	As a first step the DTI is asking faith groups to assess the current position in relation to the standards in the statement and in two years time will ask faith groups what progress has been made. Individuals will have an opportunity to contribute to this process at both stages. Based on the information and evidence provided, DTI will consider if any further action is appropriate, including legislative action. The DTI will encourage other faith groups, which did not participate in the working group, to consider joining this process.

WORK AND PENSIONS

Benefit Fraud Inspectorate

James Plaskitt: On behalf of my right hon. Friend the Secretary of State for Work and Pensions, the BFI inspection reports were published today on Glasgow city council, and London borough of Hounslow. Copies have been placed in the Library.
	The BFI reports detail a range of strengths and weaknesses in the housing benefit services provided by councils and make recommendations to improve the security and efficiency of benefit delivery.
	My right hon. Friend the Secretary of State is considering the reports and may ask the councils for proposals in response to BFI's findings.